Question

25) A "Qualified employee discount" is?

A. Discount offered employees that's not more than 20% of the price for services offered to customers 0
B. A service or an item of such small value as to make accounting for the benefit unreasonable
C. A service the employee could deduct as a business expense if he or she had paid for it

Answer 1

Option (B), A Qualified employee discount is a reduced price provided to employees for products or services, which must not exceed the gross profit percentage for goods or more than 20% of the customer price for services, according to U.S. tax regulations.

Step-by-step explanation:

A "Qualified employee discount" is generally defined as a reduction in price provided to employees on goods or services that are also offered to customers. According to the Internal Revenue Service (IRS) in the United States, an employee discount is only qualified if it does not exceed certain thresholds. For merchandise, the discount must not exceed the gross profit percentage of the price charged to customers.

For services, it must not be more than 20% of the price charged to customers. The provision of a service at a reduced price that the employee could deduct as a business expense if they had paid for it does not fall under the scope of a qualified employee discount. Additionally, items or services that are of negligible value and deemed impractical for accounting are not classified under this term; they are instead treated as 'de minimis' fringe benefits.